Fed sticks to US stimulus reduction

MARTIN CRUTSINGER
Last updated 08:34 30/01/2014
US Federal Reserve Chairman Ben Bernanke
Reuters

LAST CALL: US Federal Reserve Chairman Ben Bernanke.

Relevant offers

World

Why being a Yakuza gang member isn't illegal in Japan Climate change's cost is paid for in maple syrup Dick Smith blames 'jumbo loads' of immigrants for high Aussie house prices Australian booking site blacklists 38,000 'no-show' diners 'This is war': Amber Harrison promised to 'destroy' Seven boss Tim Worner Thousands of IT professionals, including Silicon Valley figures, show interest in Wellington Ski resort razed by the Taliban lifts Pakistan's domestic tourism Mired in poverty, few Greeks hope for better days Gibraltar seizes superyacht owned by Russian billionaire Andrey Melnichenko over $23m debt claim Kraft Heinz withdraws offer to merge with Unilever

The Federal Reserve says it will cut its monthly bond purchases by an additional US$10 billion (NZ$12.1b) to US$65b because of a strengthening US economy.

It's doing so even though the prospect of reduced Fed stimulus and higher US interest rates has rattled global markets.

The Fed also reaffirmed its plan to keep short-term rates at record lows in a statement issued after Ben Bernanke's final policy meeting. Bernanke will step down Friday after eight years as chairman.

Many investors fear that reduced Fed bond buying will boost US rates and cause investors to move money out of emerging markets and into the United States for higher returns. Currency values in emerging nations have fallen. India, Turkey and South Africa have raised rates to try to protect their currencies.

Ad Feedback

- AP

Special offers

Featured Promotions

Sponsored Content